● Learn your business credit score for working capital loans
Raising working capital is crucial to meet the day-to-day financial needs of a company. A preferable way is to apply for working capital loans from a nearby bank or Non-banking financial company. These agencies, however, carefully analyze capital borrowing power and of course the ability of the business to repay the debt in time. In short, your business must be “creditworthy” for working or any business loan approval.
● Good credit score to finance working capital
Of the many standards, the CIBIL score is the most widely accepted standard for Indian MSMEs. The CIBIL score ranges from 0-900. A score of 600 or below indicates a poor credit score. A credit score between 600-750 calls for improvement in credit history and other credit-related variables. If the score is 750 and above, it is a good business credit score, and you will most likely get approved for corporate credit cards, working capital loans, etc.
● Watch for the credit score red flags
Beware of late debt payments and any pending credit or irregularities. Consumer feedback also forms an important pillar of your credit report and entrepreneurs must strive to maintain healthy public records. Credit must be availed as the r company’s borrowing power and credit utilization efficiency. A general rule is that the credit utilization of a company must be 30% of its credit line. Lastly, DO NOT cancel your previous corporate credit card/accounts as it wipes off your previous creditworthy history.
● Alternatives to get working capital loans
There can be many alternatives to working capital loans, such as gold loans or borrowing from close friends or angel investors. However, most ways require you to have collateral or compensate for the collateral-free loan with share dilution, which is equally unhelpful. However, complementary to our current needs and compatible with a digital interface, the corporate credit card is swiftly gaining popularity.
● Reasons to choose Corporate credit card
With EnKash, entrepreneurs experience financial freedom like never before. We have understood the needs of our entrepreneurs and their untapped potential. Unlike traditional corporate credit cards, the EnKash Credit Card is designed as an all-utility credit card that can be used by all teams & employees with no special training and covers all GST bills, supplier & vendor payments, etc. with the least risk of internal or external fraud. And unlike bank loans, we do not care about your company’s credit score or for collateral assets.
● Applying for Corporate Credit Card
Applying for a business credit card in India is easy with a 100% digital KYC, where you can order your business credit card from your comfort place and in the least downtime. We also ask for minimal document submission and with the facility for online (digital) submission, corporate credit cards like the EnKash Credit Card can be availed in a matter of minutes.
To know more details visit: https://www.enkash.com/resources/blog/manage-low-business-credit-score/